Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Why Abiomed Stock Is Flying High Today

The company reported better-than-expected results and issued bullish guidance.

What happened

Investors in Abiomed(NASDAQ:ABMD), should be smiling from ear to ear today. Shares of the heart recovery medical device maker jumped as much as 12% in early morning trading on Thursday after the company reported stellar fiscal 2018 fourth-quarter results and issued bullish guidance. As of 11:08 a.m. EDT, the stock was up about 9%.

So what

Abiomed's fiscal fourth-quarter results were strong across the board. Here are a few of the highlights from the period:

Abiomed also shared guidance that suggests that the good times will continue:

Revenue in the fiscal year 2019 is expected to land between $740 million and $770 million. This represents growth of 25% to 30% over the prior year, and the midpoint of this range exceeds the $747 million that Wall Street was expecting.

GAAP operating margin is forecast to continue moving higher, to a range of 28% to 30%.

All in all, Abiomed proved once again that its business remains on fire.

Now what

Looking beyond the financials, Abiomed had a number of other positive updates to share with investors:

The company received two label expansion claims for its Impella heart pumps in February. These new indications should expand its addressable market in the U.S.

Abiomed received FDA approval for a new Impella pump called the CP in early April.

Also in April, the company won European approval for its Impella 5.5.

In total, Abiomed continues to provide investors with reasons to believe that its exponential growth rate can continue from here. While shares continue to trade at a nosebleed valuation -- the stock is currently selling for more than 27 times trailing sales -- I don't think that long-term investors should be looking to cash in their chips anytime soon.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Abiomed. The Motley Fool has a disclosure policy.

Author

Brian Feroldi has been covering the healthcare industry for the Motley Fool since 2015. Brian's investing goal is to find the highest quality companies that he can find, buy them, and then to sit back and let compounding work its magic. See all of his articles here and make sure you follow him on Twitter.
Follow @brianferoldi